The City of Stamford's Housing Development Program aims at preserving the existing stock
of affordable housing and developing new housing for rent or sale to low-income people. It
accomplishes this by partnering with both private owners and non-profit developers to provide
CDBG and other HUD funding as secondary financing to leverage private bank loans.

The CDBG financing is structured as 30-year deferred-payment loans which are repaid
when the property is sold; repayment usually occurs within 15 years, returning funds to the City
which it can recycle into new housing development. The City typically receives $60,000 to $100,000
in repaid loans each year. The loan payments are made as a single lump sum, rather than on a
monthly basis, thus achieving administrative efficiencies. The City's current loan portfolio has a
total loan value of nearly $8 million - more than six times larger than the City's annual CDBG
entitlement.

The CDBG loan normally finances approximately 25 percent of the total cost of the
rehabilitation or development of the housing, with the balance of the financing (approximately 75
percent) coming from private lenders. The property owners generally qualify for a larger bank loan
because the repayment of the CDBG loan is deferred. By leveraging private funds in this way, the
City of Stamford is able to accomplish four times as much housing rehabilitation and development
than if CDBG funds were used to finance 100 percent of the development costs.

One of the greatest obstacles to housing rehabilitation and development has been the pre-construction costs associated with architectural design and the development of specifications.
Such costs are normally borne by the property owner and must be paid up-front. The City of
Stamford is using its CDBG funds to eliminate this obstacle by offering architectural services to
participating owners. While these services were initially offered at no cost, two years ago the City
began offering them as a forgivable loan. The owner reimburses the City's CDBG program with
funds from the private loan obtained from the bank. If the housing development proposal does not
proceed, the loan is forgiven and the CDBG program absorbs the cost.

During the last two years, the City has used its CDBG funds in conjunction with other HUD
funds and private financing to rehabilitate or construct 194 affordable rental apartments. These
have been completed and now are occupied by low-income residents. The projects have ranged
in size from two-family homes to a 48-unit apartment building. Together, these developments
represent a total investment in housing of more than $20 million, with $15.1 million of this being
privately financed, $2.7 million provided through a HOPE II grant, $444,000 coming from the City's
capital budget, and the remaining $1.9 million provided as loans using CDBG, HOME and HUD's
Lead Paint Hazard Control Program funds.